Indian capital mkt nearing $5-trn mark
But unlikely before polls as experts rule out any possibility of pre-election rally
Hyderabad: Market capitalisation (mcap) of all listed companies on BSE is just 8.2 per cent short of $5 trillion mark and the billion dollar question now is can Indian capital market reach the coveted milestone before Lok Sabha polls, which are scheduled to be held in seven phases during April 19-June 1, 2024. Market analysts see several headwinds for the domestic capital market to reach the desired level before Lok Sabha elections as they don’t see any possibility of pre-election rally.
“I don’t think any pre-poll rally as the markets reached record highs after BJP winning Assembly polls in five States. Hence, it would be sideways trading till Lok Sabha polls are over. In the medium-term, annual results season begins from April and this along with GST, GDP numbers will trigger short-term positive moments in the market. If BJP retains power for third time, but seats are below the expected target of 400, then also the market will correct. Or if hung happens, then also the correction will take place. I believe that real budget by new government will trigger a rally or fall in the market,” GV Satyanarayana, a senior market analyst, told Bizz Buzz.
Dhirender Singh Bisht, associate vice-president (technical research) at SMC Global Securities Ltd, adds that “5-6 per cent rise needed to take overall market capitalization to $5-trillion mark. BSE Sensex closed at 72,831.94 points on Friday (March 22). It requires at least 4,500 points upward journey for Sensex to take mcap to $5 trillion level. Sensex should be at 78,000 level.”
BSE Sensex gained 190.75 points or 0.26 per cent and closed at 72,831.94 points on Monday (March 24) as the market capitalisation (Mcap) of all listed companies on BSE is at Rs3,82,29,844.07 (Rs382.29 lakh cr or $4.59 trillion), lower than its peak of $4.8 trillion seen on March 7, 2024, when BSE Sensex hit all-time high of 74,119.39 points. Mcap on BSE rose to $4.8 trillion mark from $4 trillion level in over three months as Sensex gained 7,639 points or 11.40 per cent. Indian capital market reached mcap of Rs333 lakh crore or $4-trillion mark on November 29, 2023, as Sensex reached to 66.479.64 points.
Further, India went on moving up while other markets slipped into pressure. This made Indian capital market fourth largest mcap on January 23, 2024, as the domestic market’s valuation rose to $4.3 trillion replacing Hong Kong ($4.29 trillion). Interestingly, Sensex was 70,370.55 points lower than record level of 73,327.94 points (set on Jan 15) on that day. With $51-trillion mcap, the US leads the pack followed by China with $8.5 trillion and Japan with $6.5 trillion.
“FIIs don’t want to pump in more funds into the Indian equities ahead of Lok Sabha polls. Hence, restricted FII inflows. Election campaign by Prime Minister Narendra Modi, rising probability of BJP’s third-term at the Centre, etc., will propel markets up frequently. But real rally is expected after the poll results, if BJP gets clear majority,” observed Bisht. BSE-listed firms achieved a $1-trillion m-cap milestone in May 2007. The market cap surpassed $2 trillion in July 2017 and $3 trillion in May 2021.
